SunTrust Banks’ indirect and direct consumer portfolios increased by double digits as the bank continues to aim for a fourth-quarter closing of its merger with BB&T Bank, SunTrust Chief Financial Officer Allison Dukes said during the bank’s earnings call last week.
However, regulatory approvals are “moving at their own pace,” said BB&T Chief Executive Kelly King during the bank’s third quarter earnings call. “We believe that we are still on track for closing in the fourth quarter,” he added. “We can’t guarantee that, but we believe that we are based on all of the information that we have at this time.”
The merger, which creates Truist, is waiting on approval of the banks’ divestiture plan by the Department of Justice, although no timeline was provided for when that approval may take place. BB&T received its latest regulatory approval on July 10 by the North Carolina Commissioner of Banks. Once the merger is finalized, Truist will be headquartered in Charlotte, N.C.
In the meantime, the banks are prepping for when the merger closes. BB&T and SunTrust conducted a “legal day one readiness exercise with each of our approximately 100 merger work streams in the second half of September,” SunTrust Chief Executive Bill Rogers said during the earnings call. “The results confirmed our confidence that we’re in a position to move very quickly after receiving regulatory approval,” he said.
While the BB&T-SunTrust merger awaits approval from the DOJ, the banks are operating as separate entities. SunTrust, for one, has seen direct loan outstandings increase 23% year over year to $12.4 billion, compared with $10.1 billion last year. The increase in consumer growth was driven by LightStream and indirect auto, Dukes said during the earnings call.
“We’ve developed and continued to enhance our competitive advantage in certain differentiated businesses like LightStream,” Dukes said. “These are just a few of the reasons why we entered into our proposed merger with BB&T.”
On top of that, SunTrust is anticipating a “significantly greater capacity to invest in technology, talent and innovation” following the merger, Dukes said, noting it’s one of the key benefits of the deal.
Meanwhile, indirect loan outstandings climbed 17% to $14.1 billion in the third quarter, compared with $12 billion during the prior-year period, according to the bank’s earnings results.
Additionally, delinquencies 30 days or more past due for indirect loans dropped to 0.74% of the portfolio in the third quarter, compared with 0.83% last year. Total net charge-offs decreased to 0.48% of the portfolio, compared with 0.52% last year.
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